US scrap futures contract gains momentum

Nov 13, 2012 | 03:58 PM | Lisa Gordon

Tags  scrap futures, ferrous scrap, CME Group, Jeremy Flack, Flack Steel, Youngjin Chang, AMM Steel Scrap Conference, Joe Reinmann Kataman Metals

PHILADELPHIA — The first U.S. ferrous scrap futures contract, launched by CME Group Inc. in September, is gaining traction as participants test the waters with modest trades.

More than 3,000 tons were traded in October, a positive sign for the new hedging tool. "This is actually very good considering this is a very new market. We see this as a very positive sign for growth," Youngjin Chang, CME Group’s director of metals research, said at AMM’s 6th Annual Steel Scrap Conference in Philadelphia.

Participants are hedging small busheling tonnages of 20 to 100 tons to try the contract out. Chang recommended that attendees give the contract a try with a nominal trade.....

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